The dollar weakened against most of its major counterparts as investors mulled whether Federal Reserve Chairman Ben S. Bernanke will announce further monetary stimulus for the economy tomorrow.
South Africa’s rand and Norway’s krone were the best performers against the dollar and yen as stock-market gains in Asia and Europe spurred demand for higher-yielding assets. The dollar pared losses against the euro as claims for unemployment benefits in the U.S. unexpectedly rose last week.
“The market is treating Bernanke’s speech tomorrow almost like a policy meeting,” said Steve Barrow, the London-based head of Group-of-10 currency research at Standard Bank Plc, wrote in a client note today. “If he signals QE3, it could support higher-yielding assets like stocks, the Scandinavian currencies and the Aussie and kiwi dollars at the expense of the U.S. dollar. If the market is disappointed, then it could see a return to risk-off.”
The dollar declined less than 0.1 percent to $1.4421 per euro as of 8:40 a.m. in New York, after dropping as much as 0.4 percent to $1.4475. The yen declined for a fifth day against the euro, losing 0.3 percent to 111.26, and was 0.2 percent weaker at 77.16 per dollar.
To contact the editor responsible for this story: Dave Liedtka at firstname.lastname@example.org